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Duke Energy Corporation
Non-GAAP Reconciliation Schedules
Year-end 2004 Earnings Release



2005 and Beyond Ongoing Segmen...
Duke Energy Corporation
Twelve Months Ended December 31, 2004
Ongoing Basic Earnings per Share
(amounts in millions, excep...
Duke Energy Corporation
Twelve Months Ended December 31, 2003
Ongoing Basic Earnings per Share
(amounts in millions, excep...
DUKE ENERGY
REPORTED TO ONGOING SEGMENT AND OTHER EBIT RECONCILIATION
December 2004 Quarter and Year-to-date
(Dollars in M...
DUKE ENERGY
REPORTED TO ONGOING SEGMENT EBIT RECONCILIATION
December 2003 Quarter and Year-to-date
(Dollars in Millions)

...
Duke Energy Corporation Consolidated
Cash Flow Reconciliation Required by SEC Regulation G
($ in Millions)


             ...
Duke Energy Corporation
Fourth Quarter 2004 Earnings and 2005 Outlook
GAAP Reconciliation - Anticipated Cash Proceeds and ...
Duke Energy
Reconciliation of Debt Pay Down to Balance Sheet
(in millions)

                                              ...
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Duke Energy 02/02/05_GAAP

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Duke Energy 02/02/05_GAAP

  1. 1. Duke Energy Corporation Non-GAAP Reconciliation Schedules Year-end 2004 Earnings Release 2005 and Beyond Ongoing Segment EBIT and Related Growth Percentages The Company’s slides for the Year-end 2004 Earnings Review include a discussion of forecasted ongoing EBIT for 2005 for certain segments and, for certain segments, a discussion of a forecasted ongoing segment EBIT growth rate, which is based on historical and forecasted ongoing segment EBIT. Ongoing segment EBIT, and related growth rates, are non-GAAP financial measures as they represent reported segment EBIT adjusted for “special items,” which represent certain charges which management believes will not be recurring on a regular basis. When used for future periods, ongoing segment EBIT may also include any amounts that may be reported as discontinued operations. The most directly comparable GAAP measure for ongoing segment EBIT is reported segment EBIT, which represents EBIT from continuing operations, including any “special items.” Due to the forward-looking nature of forecasted ongoing segment EBIT, and related growth rates, for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time as the Company is unable to project any “special items” or any amounts that may be reported as discontinued operations for any future periods. 2005 Duke Energy Compensation Target and Minimum The Company's slides for the Year-end 2004 Earnings Review include a discussion of the $1.60 and $1.45 per ongoing basic share compensation target and minimum amounts, respectively, for 2005. This earnings-per-share measure used for employee incentive bonuses should track ongoing basic earnings per share, which is a non-GAAP financial measures as it excludes the per-share effects any quot;special items,quot; which represent certain charges which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure is basic earnings per share for 2005. Due to the forward-looking nature of this non-GAAP financial measure, information to reconcile such non-GAAP financial measures to the most directly comparable GAAP financial measure is not available at this time as the Company is unable to project any quot;special itemsquot; for 2005.
  2. 2. Duke Energy Corporation Twelve Months Ended December 31, 2004 Ongoing Basic Earnings per Share (amounts in millions, except EPS) Pre-tax Amount Tax Effect Basic EPS Impact Special Items: First Quarter 2004 - Gain on sale of Australian assets $256 ($18) $0.26 - Net loss on sale of DENA assets, primarily anticipated sale of southeast U.S. plants (359) 134 (0.25) - Gains on sale of other assets, including Caribbean Nitrogen Co. 14 (5) 0.01 - Charge related to planned sale of Cantarell investment (13) 5 (0.01) subtotal first quarter 2004 0.01 Second Quarter 2004 - Enron settlement (net of minority interest of $5 million) 130 (46) 0.09 - True up on net gain on sale of International Energy Assets 38 (9) 0.03 - California and western U.S. energy markets settlement (105) 37 (0.07) - Net losses on asset sales (net of minority interests of $6 million) (8) 3 0.00 Interest on related litigation reserve (12) 4 (0.01) subtotal second quarter 2004 0.04 Third Quarter 2004 - Tax benefit from restructuring 0 48 0.05 - Asset impairments, losses on asset sales and write down of equity investment at DEFS (net of minority interest of $26 million) (42) 16 (0.03) - Net gains on asset sales 4 (2) 0.00 - Tax true up on sale of Australian assets 0 5 0.01 subtotal third quarter 2004 0.03 Fourth Quarter 2004 - Adjustment to captive insurance reserve 64 (22) 0.04 - Net gain on sales of equity investments 10 (3) 0.01 - Loss on asset exchanges (7) 2 0.00 - Early contract termination charges (20) 7 (0.01) - Net gains on asset sales (net of minority interest of $20 million) 148 (51) 0.10 subtotal fourth quarter 2004 0.14 Impact of changes in shares outstanding (0.01) Total Basic EPS impact of special items year-to-date 0.21 Year-to-date Basic EPS, as reported 1.59 Year-to-date Basic EPS, ongoing $1.38
  3. 3. Duke Energy Corporation Twelve Months Ended December 31, 2003 Ongoing Basic Earnings per Share (amounts in millions, except EPS) Pre-tax Amount Tax Effect Basic EPS Impact Special Items: First Quarter 2003 - Cumulative effect of change in accounting principle ($256) $94 ($0.18) - Net gains on asset sales 16 (5) 0.01 subtotal first quarter 2003 (0.17) Second Quarter 2003 - Net gains on asset sales (net of minority interest expense of $8 million) 229 (83) 0.16 subtotal second quarter 2003 0.16 Third Quarter 2003 - Tax benefit on 2002 goodwill impairment of International Energy European gas trading 0 52 $0.06 - Net loss on asset sales (71) 28 (0.05) - DENA goodwill write-off (254) 90 (0.18) - Severance cost associated with work force reduction (105) 37 (0.08) - Settlement with the S. C. Public Service Commission (46) 18 (0.03) - Settlement with the Commodity Futures Trading Commission (net of minority interest of $11 million) (17) 0 (0.02) subtotal third quarter 2003 (0.30) Fourth Quarter 2003 - DENA plant impairments and DETM charges (net of minority interest of $51 million) (2,826) 1,046 (1.97) - DENA redesignation of hedging contracts to mark-to- market (262) 97 (0.18) - Charges and impairments for Australia and Europe (292) 69 (0.25) - Severance cost associated with work force reduction (48) 18 (0.03) - Tax adjustments -- 23 0.03 - DEI reserves and charges for environmental settlements in Brazil (26) 10 (0.02) - Write-off of risk management system (51) 19 (0.04) - Net gains on asset sales (net of minority interest of $1 million) 15 (6) 0.01 subtotal fourth quarter 2003 (2.45) Total Basic EPS impact of special items year-to-date (2.76) Year-to-date Basic EPS, as reported (1.48) Year-to-date Basic EPS, ongoing $1.28
  4. 4. DUKE ENERGY REPORTED TO ONGOING SEGMENT AND OTHER EBIT RECONCILIATION December 2004 Quarter and Year-to-date (Dollars in Millions) Special Items Gains Gains (Losses) on Impairment Early Enron/ Adjustment to (Losses) Sales of and Other Contract California Captive Reported Ongoing on Sales Equity Related Termination Settlements, Loss on Asset Insurance Segment Earnings of Assets Investments Charges Charges net Exchanges Reserves Total EBIT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS December 2004 Quarter-to-Date EBIT BY BUSINESS SEGMENT Franchised Electric $ 252 $ - $ - $ - $ - $ - $ - $ - $ - $ 252 Gas Transmission 321 4 11 - - - - - 15 336 Field Services 128 - - - - - - - - 128 Duke Energy North America (50) 146 A - 1 (20) B - - - 127 77 International Energy 64 (3) - - - - - - (3) 61 Crescent 50 - - - - - - - - 50 Other (80) - (1) - - - (4) C 64 B 59 (21) December 2004 Year-to-Date Franchised Electric $ 1,464 $ 3 $ - $ - $ - $ - $ - $ - $ 3 $ 1,467 Gas Transmission 1,278 16 16 - - - - - 32 1,310 Field Services 404 1 D (16) E (10) F - 1 B - - (24) 380 Duke Energy North America (288) (228) G - (2) (20) B 3 B,H - - (247) (535) International Energy 236 (2) 1 (13) B - - - - (14) 222 Crescent 240 - - - - - - - - 240 Other (164) 4 2 - - 21 B (4) C 64 B 87 (77) A - Including minority interest benefit of $20 million. B - Recorded in operation and maintenance expense. C - Recorded in other income and expenses, net. D - Net of minority interest of $1 million. E - Including minority interest benefit of $7 million. F - Net of minority interest of $12 million. G - $(222) million recorded in gains (losses) on sales of other assets, net (including minority interest benefit of $26 million) and $(6) million recorded in operation and maintenance expense. H - Net of minority interest of $5 million. Prepared By: Corporate Reporting 2/1/20056:30 PM
  5. 5. DUKE ENERGY REPORTED TO ONGOING SEGMENT EBIT RECONCILIATION December 2003 Quarter and Year-to-date (Dollars in Millions) Special Items Severance and Settlement DENA Related Costs with the DENA Plant Redesignation Associated Settlement Commodity Gains (Losses) Impairments of Hedging Environmental with Work with the S.C. Futures Ongoing on Sales of and DETM DENA Goodwill Contracts to Settlements in Force Public Service Trading Reported Earnings Assets Charges Write-off Mark-to-Market Brazil Reduction Commission Commission Total Segment EBIT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS December 2003 Quarter-to-Date Franchised Electric $ 226 $ 3 $ - $ - $ - $ - $ (32) $ - $ - $ (29) $ 197 Gas Transmission 303 16 D - - - - (11) - - 5 308 Field Services 58 (3) A - - - - (4) - - (7) 51 Duke Energy North America (77) 6 (2,826) B,G - (262) H - (5) - - (3,087) (3,164) International Energy 68 (2) - - - (26) - - - (28) 40 Crescent 72 - - - - - - - - - 72 December 2003 Year-to-Date Franchised Electric $ 1,505 $ 6 $ - $ - $ - $ - $ (78) $ (30) $ - $ (102) $ 1,403 Gas Transmission 1,253 93 E - - - - (29) - - 64 1,317 Field Services 183 8 A,F - - - - (4) - - 4 187 Duke Energy North America (72) 100 (2,826) B,G (254) (262) H - (10) - (17) C (3,269) (3,341) International Energy 244 - - - - (26) (3) - - (29) 215 Crescent 134 - - - - - - - - - 134 A - Including minority interest benefit of $1 million. B - Net of minority interest of $51 million. C - Net of minority interest of $11 million. D - $13 million recorded in gains (losses) on sales and impairments of equity investments and $3 million recorded in gains (losses) on sales of other assets, net. E - $89 million recorded in gains (losses) on sales and impairments of equity investments and $4 million recorded in gains (losses) on sales of other assets, net. F - $11 million recorded in gains (losses) on sales and impairments of equity investments and $(3) million, net of minority interest benefit of $1 million, recorded in gains (losses) on sales of other assets G - $(2,641) million recorded in impairments and other related charges, $(76) million recorded in gains (losses) on sales of other assets, net (net of minority interest of $51 million) , and $(109) million recorded in operation and maintenance expense. H - Recorded in impairment and other related charges. Prepared By: Corporate Reporting 2/1/2005 6:30 PM
  6. 6. Duke Energy Corporation Consolidated Cash Flow Reconciliation Required by SEC Regulation G ($ in Millions) 2005 Duke Energy Excerpts from Duke Energy Corporation Earnings Call (February 2, 2005) Primary Sources of Cash per Presentation: Net income (based on $1.60 ongoing basic per share target) (a) $ 1,525 Depreciation and amortization (a) 2,125 NBV of ongoing Crescent sales (a) 475 Cash tax carryforwards (a) 450 Other sources/(uses), net (a) (150) Total Sources $ 4,425 Primary Uses of Cash per Presentation: Capital expenditures (b) (2,575) Clean air expenditures (a) (300) Dividends (c) (1,050) Total Uses (3,925) Net Cash $ 500 Reconciliations to amounts per U.S. GAAP reporting: Operating cash flow components from above [summation of (a)] $ 4,125 Reconciling items to GAAP operating cash flow (1) (375) Net cash provided by operating activities per GAAP Consolidated Statement of Cash Flows $ 3,750 Investing cash flow components from above [summation of (b)] $ (2,575) Reconciling items to GAAP investing cash flow (2) 600 Net cash used in investing activities per GAAP Consolidated Statement of Cash Flows $ (1,975) Financing cash flow components from above [summation of (c)] $ (1,050) Reconciling items to GAAP financing cash flow (3) (1,400) Net cash used by financing activities per GAAP Consolidated Statement of Cash Flows $ (2,450) Notes: (1) Amount primarily consists of non-operating cash flow items, such as proceeds from the sales of commercial and multi-family real estate and net distributions to/contributions from minority interests. In addition, amount reflects capital expenditures for residential real estate. (2) Amount primarily consists of proceeds from the sales of commercial and multi-family real estate and capital expenditures for residential real estate. (3) Amount primarily consists of estimated net debt repayments and net distributions to/contributions from minority interests.
  7. 7. Duke Energy Corporation Fourth Quarter 2004 Earnings and 2005 Outlook GAAP Reconciliation - Anticipated Cash Proceeds and Tax Benefits from Sale of Grays Harbor (in millions) Cash Proceeds $ 21 Tax benefits 95 Total $ 116
  8. 8. Duke Energy Reconciliation of Debt Pay Down to Balance Sheet (in millions) 12/31/2003 12/31/2004 Difference Long-term debt $20,622 $16,932 ($3,690) Current maturities of LTD and preferred stock 1,200 1,832 632 Notes payable and commercial paper 130 68 (62) Total Debt and Trust Preferred Securities 21,952 18,832 (3,120) Changes due to foreign currency (300) Other cash changes (89) Sub-Total (389) Redeem Australia Debt (890) Redeem WEI Preferred Securities (176) Total Change ($4,575) Total Debt Paydown per Slides ($4,600)

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